Question: QUESTION 4 (20 Marks) Sanchez LTD issued corporate bonds 3 years ago with a coupon rate of 10% and a par value of R100. The

QUESTION 4 (20 Marks) Sanchez LTD issued corporate bonds 3 years

QUESTION 4 (20 Marks) Sanchez LTD issued corporate bonds 3 years ago with a coupon rate of 10% and a par value of R100. The redemption date is 31 December 2010 and the coupon payment occurs on 31 December each year. The current date is 01 January 2005. 4.1 What are the fundamental building blocks of valuation? (10) 4.2 (10) What is the value of each bond issued by Sanchez LTD if the bonds issued by similar firms and with the same term of maturity are currently trading on yields of 7% per year

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